How neo-Nazis and right-wing extremists profit from bitcoin

People at the alt-right "Unite the Right" March in Charlottesville, Virginia.
(Photo by Chip Somodevilla/Getty Images)

Online payment systems such as ApplePay and Paypal have banned neo-Nazis and frozen some accounts.

In response, many alt-right figures published their bitcoin wallet IDs online to receive donations. Some of them have collected millions of dollars in cryptocurrency.

Neo-Nazi publishers also try to receive money in similar ways.

The Coinbase exchange has frozen an account belonging to the Daily Stormer.

Last year there were two campaigns initiated by the political far-right that attracted worldwide attention.

In the United States, right-wing extremists demonstrated on August 11, 2017, under the slogan "Unite the Right" in the city of Charlottesville.

It was a major meeting of the American extreme right: neo-Nazis, Alt-Right, Ku Klux Clan and White Supremacy supporters freely showed their racism and anti-Semitism.

Riots broke out and several counter-demonstrators were deliberately run over by a neo-Nazi in a car. One woman was killed.

At the same time in Europe, some members so-called "Identitarian Movement" (which is monitored in Germany by the Federal Office for the Protection of the Constitution) made their way to the Mediterranean on a chartered ship and remained there for several weeks.

Activists from Germany, Austria, France and Italy tried to disrupt the efforts of relief and rescue workers off the Libyan coast to prevent refugees from crossing from Africa into Europe.

Paypal cuts off the extreme right

But there was one major problem for the right-wing extremists on both sides of the Atlantic: the general public increased pressure on banks and the online payment systems through which the right-wing extremists received cash donations to fund their racist actions.

The online payment services Paypal and Apple Pay stopped transactions by organizations and right-wing extremist activists, blocked them on their platforms, or froze accounts; web hosters and tech companies such as Google banned right-wing extremist users and disbanded right-wing websites.

The players on the far-right then looked to bitcoin. US neo-Nazis and right-wing extremist groups, such as the Identitarian Movement and their most famous leader in the German-speaking world, Martin Sellner, have increasingly been campaigning for bitcoin donations since the summer of 2017.

That was bitcoin's biggest breakthrough for the right-wing extremists.

The anonymity of bitcoin makes it easy for them to collect donations without being financially censored by traditional institutions.

Even before the events of Charlottesville, Richard Spencer had declared bitcoin the currency of the Right.

He is a prominent member of the alt-right — a loosely organized movement that holds racist, anti-Semitic and sexist views and aims at creating an American population of exclusively white ethnicity.

Bitcoin is exploited by right-wing extremists

After the protests in the small town of Charlottesville in Virginia and the actions of the "Identitarians" in the Mediterranean, right-wing extremist leaders and extremist movement experts alike emphasized that bitcoin, as the first and best-known cryptocurrency, had regained its importance for right-wing activists, especially as the extremists looked for ways to operate outside the reach of government control and technology companies. Alice Weidel, co-chairwoman of the AfD in the German parliament, also supported bitcoin during a debate.

The currency, which was originally conceived as an apolitical means of payment, is being politicized and adopted by the far right.

When it suits their purposes, they claim not only terms but also shoe brands, comic figures, or even diets for their nationalism.

Bitcoin is just another example of this arbitrariness, but it is a highly profitable one.

Bitcoin hype could be a financial blessing for extremists

In the following months after racists and anti-Semites chanted "Jews will not replace us" in Charlottesville and the "Identitarians" tried to hinder the work of rescuers in the Mediterranean, the value of bitcoin quadrupled. In December, financial markets began trading in the digital currency, catapulting the price of a single bitcoin to more than $20,000 at times. On Thursday, bitcoin was still worth more than $11,000.

Extremists who have invested in bitcoin over the past months and years or who have received bitcoin donations now hold a proverbial winning lottery ticket. The proceeds could be used by the xenophobes to communicate political messages, organize events, keep websites online, launch new platforms or set up housing projects for offline networking.

Supporters of far-right party "Die Rechte" during their march walk past people protesting against neo-Nazi movement in Leipzig, Germany, March 18, 2017.
Reuters/Fabrizio Bensch
But not everyone seems to benefit from the bitcoin hype. The ban on services such as Paypal or ApplePay or the closing of accounts impacted the movement severely. Richard Spencer, the alt-right voice, told the Washington Post: "We had a lot of problems because we got wiped out." And that he would have liked to "buy more bitcoin."

The fact that Spencer has so far only been able to benefit to a limited extent from bitcoin is also suggested by data. A Twitter bot programmed by John Bambenek, an American cyber-security researcher, posts daily updates on transactions by American neo-Nazis.

At the beginning of January, Spencer only had bitcoin assets of 0.1234 BTC (approximately $1,800), based on two transactions in November. However, it is possible that Spencer may have other wallets that Bambenek is not aware of.

Right-wing publisher receives more bitcoin after Charlottesville

Bitcoin can be used almost anonymously, which makes it difficult for platforms to block right-wing extremists.

But in order to point out the possibility of making a donation, players sometimes put the receiving address of their wallet, the bitcoin wallet, on their website.

For example, blockchain.info can be used to find out how bitcoins of right-wing extremist activists or organizations come and go — but it is usually uncertain where the money flows to, where the amounts come from and how many other digital wallets are integrated into the bitcoin users' network.

Or whether the actors are using other channels to call for donations in bitcoin or other cryptocurrencies that are not publicly available.

Since the summer, the bitcoin wallet of Counter-Currents, a neo-fascist publishing house that sees itself as America's journalistic mouthpiece for the new European Right, has been growing steadily.

By the end of December, the value stood at about 7.7 BTC (approximately $115,000). However, the largest transactions to date — two incoming bitcoins in May and three in June — took place in 2016.

Since August, however, the smaller bitcoin payments to Counter-Currents have increased significantly. After no payments were received between the beginning of May and mid-August, the transactions then shot up only a few days after the Charlottesville demonstration.

25 of a total of 47 transactions between March 2016 and December 2017 fell into the Charlottesville period. These were smaller amounts of bitcoin, which suggests that they were donations.

After the riots in Charlottesville, Counter-Currents was cancelled by its web hosting provider and Paypal. As a result, the publisher increasingly called for bitcoin donations.

Daily Stormer's Wallet frequently shows "0.1488" transactions

Neo-Nazi Andrew Anglin, founder and publisher of the US Neo-Nazi website the Daily Stormer (which is based on the propaganda magazine Der Stürmer from the Third Reich) has even greater bitcoin wealth.

The Southern Poverty Law Center (SLPC), an organization that fights against racism and for civil liberties in the US, calls the Daily Stormer the "top website for spreading hatred" in the US.

At the beginning of January, Anglin had just under 38 BTC, which was worth over $550,000 on Thursday. Analyst Bambenek estimates that Anglin has invested around $250,000 in bitcoin since 2014, he told the Washington Post.

Many of the incoming and outgoing transactions — last year's figure was 17 — are amounts including the figure of 1488. In this case the 14 stands for the "Fourteen Words", a cipher for the neo-Nazi doctrine that is particularly widespread in the USA: "We must secure the existence of our people and a future for white children." The double-8 stands for the eighth letter in the alphabet, the double eight is therefore an abbreviation for "HH": "Heil Hitler".

Hacker Andrew Auernheimer owns bitcoin assets worth millions

Coinbase, one of the largest cryptocurrency trading platforms, cancelled the Daily Stormer's account in August. It announced that it was taking action against users who spread hatred and supported violence. But the transactions continue to run for Anglin, even the Coinbase lock could not change this.

The code "1488" can also be found fifteen times in transactions of the American neo-Nazi, hacker and internet troll Andrew Auernheimer between 2014 and 2017.

Auernheimer, better known under the pseudonym "Weev", rose to fame with a hacking attack on the American telephone company AT&T, for which he was sentenced to 41 months imprisonment in 2013, but was released a year later on appeal and moved to Transnistria, a small region on the eastern border of Moldova supported by Russia.

He also temporarily managed the website of the "Daily Stormer". The transactions show that Auernheimer accumulated assets of more than 194 BTC between 2014 and the end of 2017, which corresponds to more than $2.8 million at the current exchange rate.

The Identitarian Movement solicits bitcoin donations

In Europe, right-wing extremists are also trying to use digital currency donations as a way of circumventing account freezes. Accounts of the "Identitarian Movement" in Germany and Austria were banned at the end of June. Paypal blocked the cadre organization and the platform "Kickstarter" banned the neo-fascists. In reaction to this they tried to collect bitcoin donations.

Between August and December, 1.66 BTC went to the Wallet of the German "Identitarians", which corresponds to around $24,000 (€20,000). Dorian Schubert, activist of "Kontrakultur Halle", a regional group of the "Identitären Bewegung Deutschland" (Identitarian Movement Germany), told Business Insider Germany that these were mainly donations.

Meanwhile, the donations portfolio of the Identitary Movement Germany was expanded to include the cryptocurrencies Litecoin (LTC) and Ripple (XRP).

The Litecoin Wallet had 92 LTC at the beginning of January (at that time around €18,000), the Ripple Wallet had 5560 XRP (around €9400). According to Schubert, the Litecoin and Ripple credits have so far only been achieved by transferring bitcoin donations to the other crypto wallets.

Other "Identitarians", however, have seen a far slower crypto-acquisition. Martin Sellner, co-head of the "Identitären Bewegung Österreich" (Identitary Movement Austria), offers bitcoin as a donation option on his website.

Sellner, who used to engage with the "Identitarians" around the Austrian neo-Nazi Gottfried Küssel, received 0.16 BTCs between July and December 2017. Sellner has not yet responded to requests for donations or investments.

The French "Génération Identitaire" wallet had no transactions in 2017 and the Irish and British offshoots ("Generation Identity") have so far only announced that they are accepting bitcoin donations.

"Identitarians" network with alt-right activists

In addition, the "Identitarians" consist of and recruit primarily from (former) neo-Nazi cadres and right-wing fellowships, while in the United States there is a large right-wing hacker scene, which uses agitation and trolling to try to disrupt discourses, subversively undermine them and duel with the left-wing hacker scene.

It is therefore also related to the technical affinity of many American right-wing extremists that they invest in bitcoin more extensively and, above all, have been investing in it for a long time.

But the networking between the Alt-Right and European (new) right-wing activists has intensified significantly in the past year, especially among the younger generation: Sellner was a guest at a number of Alt-Right lectures last autumn and is in a relationship with the American right-wing activist Brittany Pettibone.

Pettibone and Lauren Southern, a Canadian old-right activist, accompanied "Defend Europe" with Youtube videos and social media contributions during the summer. Southern also collects bitcoin donations, receiving 4 BTC at the beginning of January (approximately $60,000); most of the funds were received from June to August, while Southern reported on "Defend Europe".

Right-wing projects are coming to a standstill, donations seem to be increasingly lacking

The Austrian "Identitarians", however, continue to rely on traditional bank transfer - by opening a new account with the Hungarian TakarékBank in order to avoid the domestic boycott. But even in this way, donations seem to have stalled for some time now: The Austrians want to collect €20,000 for a "Centre in Vienna."

If you believe the information on the group's homepage, less than €1,000 has been collected so far. Between March and December 2017, only €90 was donated to the project.

Accordingly, the "Identitarians" are still more than €8,000 away from creating the film studio they want; here too, little has changed financially within the last year.

The "Identitäre Bewegung Austria" has so far not responded to the request for a statement on whether or not the figures correspond to the current state of donations.

After "Defend Europe", the enthusiasm of patriotic donors seems to have faltered. The "Identitarians" had collected over $200,000 for their campaign via the right-wing crowdfunding platform WeSearchr, on which the "Daily Stormer" is also calling for support, apparently to come back after weeks with no more to show for it than a few photos and videos.

And then there is "Patriot Peer," a proposed app intended to connect right-wing nationalists and extremists with simple gamification elements. The developers have been marketing it heavily to solicit donations.

€20,000 has apparently already been invested into the development of the app, but since the big announcement a year ago, the release has been postponed again and again. They will only say: the app is coming soon.

If "Patriot Peer" is actually released at some point, the "Identitarians" will face the next hurdle: the App stores. Then the neo-fascists could once again be denied access to common platforms.